US Firm Launches Company-Sponsored Bitcoin Retirement Plans

[fillippone]

Another brick in the “institutional money adoption” wall.
American corporates will be able to embed bitcoin in their pension funds for their employees.

US Firm Launches Company-Sponsored Bitcoin Retirement Plans

DAiM will serve as an adviser and fiduciary while helping companies create a 401(k) plan that allows a maximum allocation of up to 10% in bitcoin (BTC, +0.95%) alongside varying degrees of exposure to traditional assets, according to an announcement Thursday.

Cryptocurrency associated with the Employee Retirement Income Security Act (ERISA)-compliant plans will be held in New York-regulated Gemini Trust’s cold storage custody.

I see the this news as a true revolution for at least two reasons:

• this is a sign that bitcoin is now going to be embedded in the product offering by “traditional players”, that decided to cooperate with the enemy before disappearing. Of course this means that the fiscal, legal and compliance framework is almost complete
• sizes can be huge, corporate funds money has been a driving in traditional markets for years
• hodling horizon is in the decades horizon. This money are being sucked into cold storage not to be seen again for LONG time on exchanges.
  
  

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[Lucius]

I totally agree that this is big news, so maybe as you say revolutionary in terms of the unimaginable adaptation that Bitcoin is making in areas where it was completely impossible just 2-3 years ago. I assumed that the amount in pension funds was significant, so I found data that this amount in the US at the end of 2019 was as much as $18.8 trillion.

We can assume that the demand for BTC will be even higher next year, and as you have noticed, everything that is bought for this purpose ends up (specifically in this case) in Gemini cold storage for a long time. I hope some people will have much more enjoyable retirement days with the help of Bitcoin

[Harriti]

I see the this news as a true revolution for at least two reasons:

• this is a sign that bitcoin is now going to be embedded in the product offering by “traditional players”, that decided to cooperate with the enemy before disappearing. Of course this means that the fiscal, legal and compliance framework is almost complete
• sizes can be huge, corporate funds money has been a driving in traditional markets for years
• hodling horizon is in the decades horizon. This money are being sucked into cold storage not to be seen again for LONG time on exchanges.
  
  

Yes, this will reduce the amount of bitcoins on exchanges and also in part reduce the manipulation power of underground institutions.
The special thing America has a very wonderful financial institution and the majority of rich people are people involved in stocks. Therefore, this is a very potential market for Bitcoin to develop its value.
Another very good news for both the Crypto market and Bitcoin, I think it is not long before the crypto market will pump again like 2017.

[mnporter2001]

If this plan is implemented soon then it will be very good for our Crypto market. The sell-off will gradually decrease and from there, the price of Bitcoin will also move less volatile.
But it just stopped at "plan". As you see, there have been a lot of plans that have been put in place in the Crypto market since the beginning of the year but most of them were rejected. The main problem is controlling money laundering transactions, financial companies have not been able to solve that difficult problem.

[TitanGEL]

So, there's someone cooking  here. It is good to see that there are certain companies in U.S. have that unique retirement plans like this but the thing is only 10% is the maximum allocation in this plan, I actually one of the haters of retirement plans especially the 401k before because my goal is to achieve financial freedom and not just comfortable life like those people who are seeking job security and applying those kind of plan. Disclaimer that there is no bad thing applying in that kind of traditional retirement plans, my mindset is just different from the others. I do not now why I hate pensions and some retirement plans but one thing is sure it is because of the information that I keep reading in different books. This kind of firms are usually hold millions of dollars and the 10% for sure is huge and it can also affect the movement in the market.

[sheenshane]

It's good news though, it's another hype for mass adoption is the thread all about though it's really advantageous for the Bitcoin space for it depicts the possibility that the American government will adopt bitcoin as well in no time, and if this happens everything will follow the absolute adoption will be attained by bitcoin.

However, with this plan, the demand and transactions will also increase which could make the process much slower and fees will increase though this may only happen in the early stage along the way resolution can be provided and fix the issue.

So, there's someone cooking  here. It is good to see that there are certain companies in U.S. have that unique retirement plans like this but the thing is only 10% is the maximum allocation in this plan, I actually one of the haters of retirement plans especially the 401k before because my goal is to achieve financial freedom and not just comfortable life like those people who are seeking job security and applying those kind of plan. Disclaimer that there is no bad thing applying in that kind of traditional retirement plans, my mindset is just different from the others. I do not now why I hate pensions and some retirement plans but one thing is sure it is because of the information that I keep reading in different books. This kind of firms are usually hold millions of dollars and the 10% for sure is huge and it can also affect the movement in the market.

Ain't against your belief but I don't see any negative concept on retirement plans or pensions since it's us who will benefit from this.

[hugeblack]

If this were to be limited to just Bitcoin, it would be great news, because it means more institutional influx that will eventually drive global adoption by countries.

The problem is how taxes will be calculated on it? Will it be subject to tax regulations? If so, a large part of it may be deducted as levied taxes on the earned income generated from digital currencies.

Is it possible to invest in more than one cryptocurrency?

[The Sceptical Chymist]

Yes, this will reduce the amount of bitcoins on exchanges and also in part reduce the manipulation power of underground institutions.

I don't know about that--if enough people participate in a retirement plan like this, then the amount of bitcoin being held on exchanges might be reduced, but people do cash out their plans early as well and there are a bunch of other variables I could probably think of that might make for an argument as to why the effect wouldn't be as significant as you'd think.

Anyway, this will probably be a hit with millenials and subsequent generations, but I don't think it's going to be very popular with individuals in their 40s and up.  And anyone who would put a significant amount of their retirement savings into crypto had better be young and well-paid, because this is super risky.  Personally I wouldn't participate in a plan like this, but that's just me.

The problem is how taxes will be calculated on it? Will it be subject to tax regulations? If so, a large part of it may be deducted as levied taxes on the earned income generated from digital currencies.

I'm assuming whoever is running the fund will take care of the accounting, same as traditional retirement plans.

[KennyR]

Bitcoin into retirement plan is really a big step forward in the adoption of bitcoin. This helps with people know better about bitcoin. Now the people will try to learn about bitcoin as employees were given the choice on their retirement plan. As mentioned corporate funds were very huge and this money flow into the cryptomarket will make big change in the market.

As it is company sponsored retirement plan governments doesn't have any control over it. This also adds more value for the retirement plan, but the market volatility will be much considered from consumer point of view.

[AmoreJaz]

Yes, this will reduce the amount of bitcoins on exchanges and also in part reduce the manipulation power of underground institutions.

I don't know about that--if enough people participate in a retirement plan like this, then the amount of bitcoin being held on exchanges might be reduced, but people do cash out their plans early as well and there are a bunch of other variables I could probably think of that might make for an argument as to why the effect wouldn't be as significant as you'd think.

Anyway, this will probably be a hit with millenials and subsequent generations, but I don't think it's going to be very popular with individuals in their 40s and up.  And anyone who would put a significant amount of their retirement savings into crypto had better be young and well-paid, because this is super risky.  Personally I wouldn't participate in a plan like this, but that's just me.

The problem is how taxes will be calculated on it? Will it be subject to tax regulations? If so, a large part of it may be deducted as levied taxes on the earned income generated from digital currencies.

I'm assuming whoever is running the fund will take care of the accounting, same as traditional retirement plans.

i have the same take on this. those individuals maybe 50s and up (i consider 40s now be included in the younger gen, lol), will have hesitations on taking a big risk with this type of plan. but you know, company staffs that are in charge on this dept are really good talker, so maybe they can still convince those older gen to put some percentage of their retirement plans to crypto.
 and i dont think the btc that will go to this will be significant to influence the market.
maybe we will be seeing the effect few years from now (when other big institutions will join this type of arrangement), but right now, dont think it will really have considerable impact in btc market.

and in terms of taxation purposes, this article briefly discussed how your crypto is being taxed

https://www.thesimpledollar.com/investing/cryptocurrency-and-taxes-a-starter-guide/

[fillippone]

<...>
Anyway, this will probably be a hit with millenials and subsequent generations, but I don't think it's going to be very popular with individuals in their 40s and up.  And anyone who would put a significant amount of their retirement savings into crypto had better be young and well-paid, because this is super risky.  Personally I wouldn't participate in a plan like this, but that's just me.

I personally find irrational not to have some exposure to bitcoin. It's all about volatility (yes, volatility can be a positive feature too) and expected yield.
Bitcoin has the potential, being an asymmetrical bet, to tilt investment portfolios to better than expected results (on a risk/reward perspective) than any other portfolios choice.
So think everyone should be invested, even for 1%, into Bitcoin. Please note that they should add bitcoin to their portfolios not even if they are scared, but just because they are scared!

[HabBear]

Another brick in the “institutional money adoption” wall.

"If you don't eat yer meat, you can't have any pudding
How can you have any pudding if you don't eat yer meat?"

Frankly, it feels like this news is removing a brick from the wall, no?

Either way, it's exciting news!

This news also hit a 401k Specialists News Website HERE, which is cool...it's news for them, not just us.

The next question is - what's their plan to solicit major retirement plan providers to have their BTC fund added as an investment option? Once that happens the door that connects retirement assets with the cryptocurrency community will truly be open. I also like that they're capping the investment at 10% of a 401k holder's account assets. We don't need people losing money on the occasional downward slide and then blaming bitcoin publicly for their foolish investment diversification behavior.

The upside potential for bitcoin is huge, but if real money starts going into bitcoin and away from the financial markets you'll see the financial markets slide. We may be in for a really significant reset of the financial market valuations, while the economic activity stays the same...very very interesting horizon in front of us. Who needs popcorn?

[fillippone]

The upside potential for bitcoin is huge, but if real money starts going into bitcoin and away from the financial markets you'll see the financial markets slide. We may be in for a really significant reset of the financial market valuations, while the economic activity stays the same...very very interesting horizon in front of us. Who needs popcorn?

Just think how much of the financial markets is based on some form on Store of Value. When bitcoin will be the best possible form of store of value, all other subpar forms will be inevitably stripped off their "financial" value, reverting to industrial usage. This will happen for stocks and bonds, but also for gold, real estete and land.

[exstasie]

I don't know about that--if enough people participate in a retirement plan like this, then the amount of bitcoin being held on exchanges might be reduced, but people do cash out their plans early as well and there are a bunch of other variables I could probably think of that might make for an argument as to why the effect wouldn't be as significant as you'd think.

And that's a big if. This company is virtually unheard of. I can't see mid-size and large companies working with them anytime soon. They're best bet is attracting a small niche of Bitcoin-minded small business owners who really want to offer this.

It'll be huge when Vanguard or Oppenheimer starts offering BTC funds accessible via retirement plans. I wonder how far off that is.

[Lorence.xD]

There is no cold storage for bitcoin, even though they do store it, the amount will circulate just like fiat stored in banks. I think this is not a good thing because we all know this retirement plans will be return a very low yet competitive interest, most of the profit from the growth of the stored bitcoin will come straight to the pockets of the institution big wigs, the best thing that they should do is offer a bitcoin oriented index funds which considerably grows bigger than returement funds.

[goaldigger]

Bitcoin as a retirement plan is a big thing, for sure they believed in the future of bitcoin and this news is a big thing in this market. If those companies believes on Bitcoin then we should also show our support to this market, we might see another peak this year and people will be more happy especially those who are trapped since the last bull market, Bicoin will become more big in the future and I'm also considering Bitcoin as my retirement fund.

[BTCappu]

Immediately I read your first paragraph, the first thing that came to my mind - ‘damn, another HODL that’s going to be taking money away from the market and keeping them away from circulating for a very long time.

Anyway, it’s good how a lot of institutions are starting to recognize Bitcoin, but the way they are buying up huge amounts, lol, are we really still going to have enough to be using for transactions? Because it’s not really everyone that’s here to Hodl, there are still people whose main focus is on making use of cryptocurrency, especially Bitcoin, for transactions.

[hatshepsut93]

• this is a sign that bitcoin is now going to be embedded in the product offering by “traditional players”, that decided to cooperate with the enemy before disappearing. Of course this means that the fiscal, legal and compliance framework is almost complete

I doubt that they view Bitcoin as a threat, who exactly it can replace? Banks? Investment funds? Payment networks? No way.

But if regulation and government recognition is coming, most importantly by the US and EU, if they will make it clear that they won't suddenly decide to crack down on Bitcoin, this will indeed be huge. All the institutional investors who so far were worried that Bitcoin can suddenly get banned will have one less reason to not invest.

[gantez]

the best thing that they should do is offer a bitcoin oriented index funds which considerably grows bigger than returement funds.

You mean like an investment plan, like donation or contribution like it is done in fiat for monthly distribution or stipulated time? Just wanting to know your idea to the suggestion you made.

[TopT3ns]

the best thing that they should do is offer a bitcoin oriented index funds which considerably grows bigger than returement funds.

You mean like an investment plan, like donation or contribution like it is done in fiat for monthly distribution or stipulated time? Just wanting to know your idea to the suggestion you made.

I think giving pension funds with bitcoin digital currency can provide a lot of profit when the price of bitcoin is rising like this, but when the price of bitcoin collapses it will definitely make a lot of people lose. distributing for each month in bitcoin is a very good thing but it also has a downside.